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Capitol Hill Update

HR Issues Front and Center in President’s Final State of the Union Address

Jan 15, 2016

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In his final State of the Union address, President Barack Obama chose not to deliver the traditional mantra of listing a litany of political priorities for the coming year. Instead, he outlined his key priorities for the remainder of his term in office, with a tone of optimism and a forward looking approach. Specific to HR, the President’s remarks advocated in advancing key workplace initiatives including reforming the immigration system, requiring equal pay for equal work, mandating paid leave, raising the minimum wage, promoting retirement security and providing affordable health care coverage for all Americans.

One issue the President failed to mention was his proposal to drastically increase the salary threshold under the Fair Labor Standards Act (FLSA) overtime regulations.

During the hour-long speech in the House chamber, the President called for strengthening health care and retirement benefits, along with entitlement programs such as Social Security and Medicare. He elaborated by stating that the Affordable Care Act (ACA) is all about providing benefit security and “filling the gaps in employer-based care” so that when employees “lose a job, or go back to school, or launch a new business,” they’ll still have health care coverage. From an HR perspective, SHRM believes that effective health care reform should expand access to coverage and strengthen and improve the employer-based health care system but has a number of concerns with the ACA including the excise tax on health care benefits and the definition of “full-time” for purposes of health care coverage requirements. Additionally, the President emphasized the importance of education and training for Americans so that they can attain “good-paying jobs” and cited recent education reforms designed to boost the number of graduates in fields like engineering.

In concluding his remarks, the President noted that he’s well aware that it’s an election season and therefore expectations for what is achievable on Capitol Hill this year are low. He urged Congress to work together in 2016 on some bipartisan priorities to surprise cynics. In the meantime, while legislative expectations on workplace issues are low in 2016, we can certainly expect to see more regulatory action (in addition to the issuance of a final rule likely this summer amending the FLSA’s overtime requirements) as the President looks to solidify his legacy during his final 11 months in office.

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